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Elon Musk Gets No Salary But He Just Earned More Than $700 Million in First Payout from Tesla

File photo of SpaceX owner and Tesla CEO Elon Musk. (Reuters)

File photo of SpaceX owner and Tesla CEO Elon Musk. (Reuters)

Musk earned the first portion of his stock options for keeping the company’s market capitalisation at $100 billion on a 30-day and six-month trailing average.

  • News18.com
  • Last Updated: May 29, 2020, 11:58 AM IST
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Through all ups and downs during the coronavirus pandemic and the subsequent lockdown, Elon Musk’s Tesla has hit a milestone with company's value on the stock market now above $100 billion for the first time.

The 12-figure market cap is important to Musk as a sustained $100 billion valuation over a six-month period will unlock the first part of Musk's massive 2018 compensation package, the Business Insider reported.

Tesla confirmed that Musk earned the first tranche of his massive incentive payout, in a document filed with the Securities and Exchange Commission on Thursday.

The tranche is has 1.7 million shares of Tesla, and would be valued around $775 million based on Thursday’s closing market value. Shares in Tesla closed at $805.81 on Thursday, and the options have a strike price of $350.02, the CNBC reported.

Musk earned the first portion of his stock options for keeping the company’s market capitalization at $100 billion on a 30-day and six-month trailing average.

According to a 2018 regulatory filing, Tesla also had to hit trailing-four-quarter revenue of $20 billion or EBITDA (minus stock-based compensation) of $1.5 billion for Musk to get the tranche.

Musk currently takes no salary and owned about 18.5% of the company (worth around $24 billion) as of May 1, according to FactSet, a stake . By Thursday, the proxy filing revealed, Musk’s stake in the company had risen to 20.8% — a total of 38.7 million shares, including 18.5 million used as collateral for the CEO’s personal debt. His full award is set to vest over 12 tranches with different milestone requirements, reaching up to $650 billion in market capitalization for Tesla.

Tesla stockholder Richard Tornetta is challenging the compensation plan in a lawsuit against Musk and members of Tesla’s board. Tornetta alleged in the lawsuit that Tesla’s board breached its fiduciary duty by awarding Musk excessive compensation.

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